Entering overseas markets
Advantages and disadvantages of using an overseas agent
A sales agent acts on your behalf in the overseas market by introducing you to customers who you supply and invoice direct. They are paid a commission for any sales they make ranging between 2.5 per cent and 15 per cent. The key benefit of using an overseas sales agent is that you get the advantage of their extensive knowledge of the target market.
While there are clear benefits, agency relationships can also have downsides.
Advantages of using an overseas agent
- You avoid the recruitment, training and payroll costs of using your own employees to enter an overseas market.
- An agent should be well placed to identify and exploit opportunities.
- Your agent should already have solid relationships with potential buyers - it might take you some time to build up your own contacts.
- Using an agent allows you to maintain more control over matters such as final price and brand image - compared with the other intermediary option of using a distributor.
Disadvantages of using an overseas agent
- You remain responsible for shipping and other trade-related logistics - although your agent should be able to help.
- You need to specify in an agent's contract if you need them to credit check your customers for you.
- Arrangements must be made to allow access to your sales ledger as part of the commission payments process.
- After-sales service can be difficult when selling through an intermediary.
- You may lose some control over marketing and brand image, compared with entering the market yourself.
Read more about finding and contracting with overseas agents and distributors.
Institute of Export Helpline01733 404 400